I have recently given considerable thought to technology tools and the commercial real estate business and their divergent and sometimes convergent paths.
The commercial real estate business, in theory, is not that difficult...we must move an occupant from point A to point B or convince an owner to pay us to renew the lease with his occupant OR we must find an owner with a vacant or soon to be vacant building that will hire us to find a tenant or buyer for her vacant building...period. Simple right? Not so fast.
The commercial real estate process is quite complex, however, when we analyze the true steps of a commercial real estate transaction...source, find, control, execute, close, bill, and collect. We refer to these seven steps as a transaction pipeline or pipeline for short...not to be confused with a wave set in Lahaina, BTW. The way in which commercial brokers manage their respective pipelines is as varied as a menu at Applebys.
So, at any given moment, we have deals that are bumping along in the pipeline...entering as leads and matriculating into dollars...we hope! The BIGGEST mistake (other than working without control) that I see CRE practitioners make is stopping the SOURCING while EXECUTING. The way in which we justify this is something along these lines...if I don't execute and close THIS deal, the sourcing for new deals is moot...I may not be in business. Consequently, we end up in this death spiral spending our days looking for any EXECUTION task that needs attention to the detriment of deal SOURCING. This is tantamount to a lion hunting ONLY when hungry. Once sated, the hunting (SOURCING) ceases.
If we take a look at the CRE technology world and assign the app, site, program, etc. to the corresponding PIPELINE step, we find that myriad tools have been developed to help us EXECUTE (previews, tours, tourbooks, RFPs, offers, counters, PSAs, escrow due diligence, etc.) deals but few, if any, are designed to help us SOURCE (bring qualified prospects onto our radar) deals. Revenue models for these tools tend to be monthly subscriptions...some larger than a typical mortgage...or pay per view. I get that, we all must earn a living. What is forced, however, is a decision of just WHAT CAN'T I LIVE WITHOUT? Reliable inventory?...must have! CRM?...yes, but many don't use one. Listing syndication?...what's that mean?...and so on.
So what is a tech tool that ALL brokers MUST have? The tool that delivers qualified leads to our inbox...AKA, sources deals for us. Create the income potential for us and share our risk...AKA, we don't get paid...you don't get paid. I got a preview of just such a creation last week. I am deeply intrigued by the concept and can't wait to write about it in the weeks to come.
Check out my post on CRE App Review next week for more details.
By: Allen Buchanan
Principal | Lee & Associates
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